The Glossy Podcast: A Comprehensive Review of 2024 – Inflation's Impact and the Changing Role of Department Stores

Release Date: December 25, 2024

Introduction

In its year-end episode, The Glossy Podcast delves into the significant business trends that shaped the fashion and luxury industries in 2024. Hosted by Jill Manoff, the episode features insightful discussions with industry leaders on topics ranging from the evolving role of department stores to the booming resale market, the challenges of fundraising in a profit-focused investment landscape, the strategic importance of physical stores, and the delicate balance brands must maintain between honoring their heritage and meeting modern consumer expectations.

1. Department Stores' Evolving Role

Historical Significance vs. Modern Dynamics

Before the e-commerce revolution, department stores held immense power, providing brands with prestige, widespread market awareness, and substantial sales channels. However, the landscape has shifted as brands now have the autonomy to sell directly to consumers, allowing greater control over messaging, merchandising, and customer service.

Insights from Wes Gordon, Creative Director of Carolina Herrera

Wes Gordon emphasizes the enduring importance of department stores while acknowledging their contemporary challenges:

“No, as important as ever... they still have amazing customers and amazing sales associates and managers... But it's not the only thing anymore, right? So now we have our own E Commerce. We're growing our network of our own boutiques and stores.”
— Wes Gordon (00:01:55)

Gordon highlights the necessity of cultivating strong relationships with customers, whether through large department stores or specialized boutiques, underscoring that success hinges on attracting the right clientele rather than sheer volume.

Amy Smilovic's Perspective on Department Stores

Amy Smilovic, Founder and Creative Director of Tibby, offers a contrasting view, opting to stay away from North American department stores due to perceived shortcomings:

“I think we've been a victim to a lot of things, a lot of it self-inflicted. But these bigger online retailers, there seems to be a reckoning coming...”
— Amy Smilovic (00:03:48)

She advocates for partnerships with stores that have a clear vision and are deeply invested in their business, fostering symbiotic relationships that benefit both parties.

2. Resale Market's Growth Amid Inflation

The Surge of Resale Verticals

2024 witnessed a significant boom in the resale market, with numerous brands launching resale sections on their e-commerce platforms. This trend was fueled by escalating inflation, which steered consumers towards more cost-effective shopping alternatives without compromising style.

Seth Weiser on What Goes Around Comes Around

Seth Weiser, Founder of What Goes Around Comes Around, attributes the growth to consumer desire for exclusivity and access to discontinued items:

“Customers want what they want... they are looking for choices. And of course, you can't really buy from the brand, then you're going to have to buy things from the secondary market.”
— Seth Weiser (00:07:03)

He notes that the difficulties in acquiring certain brands directly have opened avenues for the pre-owned and vintage markets, benefiting both consumers and resale businesses.

Kruti Patel Goyal's Insights from Depop

Kruti Patel Goyal, President and Chief Growth Officer at Etsy, elaborates on the multifaceted value proposition of resale:

“We know that value is not only increasingly important to people in general in this economy... Style, sustainability and value that are rare to find elsewhere.”
— Kruti Patel Goyal (00:07:50 - 00:08:17)

She underscores that the resale market not only offers financial savings but also aligns with broader consumer values such as sustainability and unique style.

3. Fundraising Challenges in a Profit-Focused Investment Landscape

Shift Towards Profitability Over Growth

In 2024, investors became more inclined to prioritize profitability over rapid growth, making fundraising a more arduous task for startups and emerging brands.

Ricardo Larude on the Benefits of Self-Funding

Ricardo Larude, Co-Founder and CEO of Larude, discusses the advantages of maintaining ownership without external investors:

“We're doing this for us and how we think that this company should be in 50 years from now... there's no rush. There's no... we're not doing it for other people.”
— Ricardo Larude (00:09:48)

He emphasizes the freedom and long-term vision that come with self-funding, allowing the brand to grow organically without external pressures.

Lara Mae Gibbs of Necknada on Strategic Partnerships

Lara Mae Gibbs, Founder and Creative Director of Necknada, shares her experience with self-funding and reflects on the potential future benefits of strategic partnerships:

“We are still self-funded... but I would like to get the business in a position one day where I can bring on strategic partners... but I just haven't felt ready for that.”
— Lara Mae Gibbs (00:10:46 - 00:14:02)

Gibbs highlights the challenges of scaling without external capital but remains open to future partnerships that align with the brand's ethos.

4. The Strategic Value of Physical Stores

Multifunctional Retail Spaces

Physical stores in 2024 transcended traditional retail functions, serving as marketing billboards, community hubs, and fulfillment centers. Brands recognized the multifaceted value of brick-and-mortar locations in an increasingly digital marketplace.

Jamie Gersh on Store Strategies at Rothy's

Although Jamie Gersh's detailed insights are not fully captured in the transcript, the discussion underscores the strategic placement and design of physical stores to enhance brand presence and customer engagement.

Kruti Patel Goyal Explains Store Redesign at Depop

Goyal elaborates on the balance between emotional and functional aspects in store design:

“We talked about the need for it to be emotional and functional at the same time. And we know that we need to make it functional and... make her want to buy the product and understand why she has to have it.”
— Kruti Patel Goyal (00:14:23 - 00:15:02)

She emphasizes storytelling and creating memorable in-store experiences that drive both emotional connections and sales conversions.

Jeff Rudis on Expanding Store Footprints Globally

Jeff Rudis of Rothy's discusses strategic international expansions to key fashion capitals:

“Paris is really the capital of fashion in Europe... Seoul, Korea... it's what's happening right now.”
— Jeff Rudis (00:16:08 - 00:17:04)

Rudis highlights the importance of establishing a presence in influential markets to serve as gateways for broader regional expansions.

5. Leveraging Brand Heritage and Authenticity

Balancing Tradition with Modernity

Brands with rich histories face the dual challenge of preserving their legacy while evolving to meet contemporary consumer expectations. Strategic storytelling and authentic brand restoration are crucial in maintaining relevance.

Jacqueline Ardrey on Vera Bradley's Restoration

Jacqueline Ardrey, President and CEO of Vera Bradley, shares the delicate process of modernizing the brand without losing its core identity:

“It was a tremendous... balancing act... we did a lot of research... project restoration... making sure that all of the touch points exuded what we wanted to say about Vera Bradley of Today.”
— Jacqueline Ardrey (00:17:28 - 00:19:19)

Ardrey emphasizes a comprehensive approach to brand restoration, ensuring that every aspect from product design to store experience aligns with the refreshed brand identity.

Neil Morgan on Filson's Timeless Appeal

Neil Morgan, Head of Strategy at Filson, discusses the importance of timeless product designs and authentic brand messaging:

“Our customer base has really shown that our product can stand the test of time... something that's timeless, something that stands for quality and heritage.”
— Neil Morgan (00:19:27 - 00:20:11)

He highlights the enduring appeal of Filson’s products and the strategic use of both long-form and short-form media to communicate the brand's heritage effectively.

Modern Storytelling Techniques

Morgan further elaborates on leveraging various media formats to engage modern audiences:

“We're doing a lot of connected TV advertising and really seeing success around 15 or 30 second clips... you only have this short moment in time to capture the audience attention.”
— Neil Morgan (00:20:32 - 00:21:30)

This approach ensures that the brand's rich history is communicated succinctly and effectively across multiple channels.

Conclusion

The 2024 episode of The Glossy Podcast offers a comprehensive overview of the pivotal trends reshaping the fashion and luxury industries. From the nuanced role of department stores in a digital age to the resilient growth of the resale market amidst economic pressures, the discussions encapsulate the dynamic interplay between tradition and innovation. Additionally, the challenges of fundraising in a profitability-focused investment climate and the strategic expansion of physical storefronts highlight the adaptive strategies brands are employing to thrive. Lastly, the emphasis on authentic storytelling and honoring brand heritage underscores the enduring importance of narrative in building and sustaining consumer connections.

As the industry looks towards 2025, these insights provide a roadmap for navigating the complexities of a rapidly evolving market, emphasizing the need for adaptability, strategic partnerships, and a steadfast commitment to brand authenticity.

For listeners interested in exploring these discussions in more depth, full episodes and additional content can be accessed through the episode's show notes. Stay tuned for the upcoming 2025 preview episode featuring Danny Parisi, Tatiana Pyle, and MoMA’s Che Costello.